The EPA contends that the Magistrate erred in law in finding that the offence with which the Respondent was charged was one not known at law. The Court found that, in effect, the provision of s 169 of the POEO Act did not apply to a council by virtue of the operation of s 220(4) of the LG Act.
The determination of the relevant question posed by Ground 3 is one of statutory construction. The relevant construction is whether, by construction of s 220 of the LG Act, the Council is to be treated as if a "corporation" for the purposes of s 144(1) (and also s 169) of the POEO Act. The EPA contended that upon a proper construction of the relevant statutory provisions the answer would be yes.
The legal status of a council is prescribed in s 220(1) and (2) of the LG Act and by the operation of those provisions it is apparent that the Council is not a corporation. However, those provisions are also subject to the operation of s 220(4) of the LG Act, which provides that "a law of the State applies to and in respect of a council in the same way as it applies to and in respect of a body corporate (including a corporation)". On this basis, whilst it is correct to say that the Council is a body politic and is not a body corporate (including a corporation) as set out in s 220(1) and (2), by operation of s 220(4), s 169 of the POEO Act would nevertheless apply to the Council and to the Respondent.
Prior to 20 November 2008, s 220 of the LG Act provided that a local council was a "body corporate".
On 20 November 2008, the Local Government Amendment (Legal Status) Act 2008 (NSW) repealed the former s 220 of the LG Act and replaced it with the current s 220(1)-(4).
There is no case law that deals specifically with the operation of s 220(4) of the LG Act in the context of s 169 of the POEO Act (or equivalent in other environmental legislation) following the 2008 amendments.
However, the EPA contends that a local council is to be treated as a corporation for the purposes of s 169 of the POEO Act notwithstanding the 2008 amendments.
The purpose of the amendment was identified when the Local Government Amendment (Legal Status) Bill 2008 was introduced by the Minister for Local Government, the Honourable Mrs Barbara Perry, wherein she explained the purpose of the amendments in the Second Reading Speech as follows:
This bill will minimise the risk of New South Wales councils being caught up in the Federal system by changing their corporate status. Instead of being a body corporate, a council will be constituted as a body politic of the State and will have the legal capacity and powers of an individual. This change in legal status is not intended to affect the day-to-day operations of a council. It will not expose councillors to greater risk of personal liability. It will not affect the existing legal rights and obligations of councils or third parties who do business with them. Its only impact is to remove the possibility that a council might be characterised as a constitutional corporation and therefore as an employer for the purposes of the Commonwealth's Workplace Relations Act. It will ensure that a council cannot be subject to the Federal industrial relations legislation.
However, New South Wales laws that apply to corporations will continue to apply to councils as if they were bodies corporate. This means, for example, that section 50 of the Interpretation Act will continue to apply to a council. As a result, a council will continue to have a seal for the execution of documents and may sue and be sued in its council name. Councils also will continue to be subject to any statutory penalties or fees - such as filing fees - that may be imposed on bodies corporate, rather than being treated as natural persons. Earlier this year the Queensland Parliament enacted similar legislation to protect council employees in that State from WorkChoices. That legislation ensured that council workforces are covered by the State industrial relations system. Due to the different legislative schemes for local government in each jurisdiction the reforms are not identical. The bill will nonetheless achieve similar certainty for New South Wales council and county council employees.
The purpose or object will often be derived from the terms of the provision, read in context, but may be assisted by having regard to extrinsic material, including the Second Reading Speech of the Minister: s 34 of the Interpretation Act 1987 (NSW) (Interpretation Act).
Parliament was plainly concerned with the amendments to the constitution of a council for the sole purpose of excluding the application of the Commonwealth WorkChoices legislation. The Second Reading Speech leaves no doubt that a council would still be treated as a corporation for all other intents and purposes. Such an approach is made plain in the reference to a council being liable for statutory penalties, which must be understood as arising from the context of criminal prosecutions.
Having regard to the requirements of statutory construction that a construction that meets the object or purpose of the statute is to be preferred to one that does not, a consideration of the Second Reading Speech indicates that there was a clear intention that the amendment did not alter the status quo in respect to executive liability such as that contained in s 169 of the POEO Act.
Section 220(4) of the LG Act must be read and understood as "a law which applies to or in respect of a body corporate (including a corporation)". There is no basis to read into the provision any additional words in order to interpret Parliament's intention or the scope or result of the provision.
Whilst s 220 of the LG Act does not contain statement about the provisions "express purpose", as a matter of ordinary statutory interpretation, the provision must be read in context of the overall legislation and be guided by the Second Reading Speech in order to identify the object.
Relevantly, s 7 of the LG Act prescribes the purposes of the Act:
7 Purposes of Act
The purposes of this Act are as follows-
(a) to provide the legal framework for the system of local government for New South Wales, (b) to set out the responsibilities and powers of councils, councillors and other persons and bodies that constitute the system of local government,
…
(c) to provide for governing bodies of councils that are democratically elected,
(d) to facilitate engagement with the local community by councils, councillors and other persons and bodies that constitute the system of local government,
(e) to provide for a system of local government that is accountable to the community and that is sustainable, flexible and effective.
Section 7(e) of the LG Act makes plain that councils are intended to be accountable. There is no statutory provision in any part of the LG Act (or any other Act) which grants the Council an immunity from prosecution for any offence, let alone environmental or pollution offences. This is a matter that must be afforded significant weight.
Put differently, in the absence of a statutory provision which grants immunity to a council for all criminal offences, or offences under the POEO Act, it could not be reasonably found that Parliament intended that a council (or a director or person concerned in the management of the Council) could avoid liability for environmental or pollution offences. Without express provisions or words, this would be a repugnant result.
Whilst there are no cases directly on point, the EPA contends that its approach to the operation of s 220(4) of the LG Act is supported by case law. In a number of cases since the coming into force the provisions of s 220 of the LG Act Courts have held that the Council is to be treated as if a corporation for the purposes of determining penalties: see for example Botany Bay City Council v Inspector Derek Pryor [2009] NSWIRComm 12 at [25]-[30]; Environment Protection Authority v Wyong Shire Council [2012] NSWLEC 36 at [63]; Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26 at [33]; and Environment Protection Authority v Queanbeyan City Council (No 3) (2012) 192 LGERA 415 at [84].
The reasoning in the relevant cases indicates that the operation of s 220(4) of the LG Act is such that a council has been treated as a corporation for the purposes of criminal liability by the operation of s 220(4). By extension those persons related to those councils should be treated in the same fashion.
The Respondent's submission that "the offence created by s 169 is not against the corporation, it is directed at the conduct of a director or a person concerned in the management of the corporation", should not be accepted. As is made apparent by the operation of s 169(2) of the POEO Act which provides:
(2) A person may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision.
The provision is directed to the underlying requirement that a "corporation" must have engaged in an act or omission. Therefore, although s 169 of the POEO Act extends liability to a person who is a director or a person concerned in the management of the corporation, known as "special executive liability", the provision could not properly be characterised as a law "in respect to a person". Further, the first four words of s 169(1), being "If a corporation contravenes", make it plain that it is a provision that applies to and in respect of a corporation.
The EPA accepts that s 220(4) of the LG Act does not operate to cause or require the word "corporation" to be substituted with "council" wherever the words appear in a law of the State. However, this acceptance does not go as far as to agree that a law of the State cannot apply to a council as if it were a corporation. Further, the EPA agrees that s 220(4) does not "deem" a council to be a corporation. However, importantly, there is a subtlety that whilst the EPA does not contend that the council is a "corporation", rather is to be treated in the same way as a corporation. Accordingly, by the operation of s 220(4), s 169(1) of the POEO Act applies in the same way to (or operates in the same way in respect of) the Council. Put simply, although the Council is not a "corporation", it is treated as a corporation for the purpose of s 169. Otherwise, s 220(4) would have no work to do. Further, s 220(4) should be understood to operate so as to affect the operation of s 220(1) and (2), again, otherwise there would be no work for the sub-section to do.
The interpretation of the Respondent would result in a council and their councillors and/or officers (management team) being immune from prosecution for any offence committed by a council as an organisation. Prior to the 2008 amendments, it was clear that persons concerned in the management of a local council could be held criminally liable for an executive liability offence (see Garrett v Freeman (No 4) [2007] NSWLEC 389 at [254]). However, if the Respondent's interpretation is accepted this would have the effect of changing the law in respect of executive liability offences and the practical result would be that persons concerned in the management of a local council could not be held criminally liable for an executive liability offence. This could not be accepted as Parliament's intention. As set out above, the Second Reading Speech indicates that Parliament's sole intention was to exclude the application of the Commonwealth WorkChoices legislation whilst preserving the operations of NSW laws that apply to councils.
Respondent's submissions
The Local Court found that the charge was not lawfully available against the Respondent because s 220(4) of the LG Act did not apply to s 169 of the POEO Act. This finding was a matter of statutory construction of the operation of s 220(4).
A charge not available at law is a defect falling within the High Court's description "of such a nature that nothing that a trial judge can do in the conduct of the trial can relieve against its unfair consequences": Barton v The Queen (1980) 147 CLR 75 at 111. A charge unknown to law is the foremost category identified in the common law where a Court may refuse to exercise jurisdiction: Jago v District Court of NSW (1989) 168 CLR 23 at 38.
The stay of proceedings was a proper exercise of discretion once the Magistrate construed s 220(4) of the LG Act as having no application to s 169 of the POEO Act such that the charge against the Respondent was unknown to law.
The proper construction of a statute is a question of law. This entitles the EPA to an appeal of right under s 42(2B)(a) of the CAR Act "but only on a ground that involves a question of law alone".
As to the construction of the relevant provisions it is for this Court to determine the proper construction of s 220(4) of the LG Act as it applies to s 169 of the POEO Act. There is only one correct construction, so examination of the Magistrate's reasoning, searching for error of law either in reasoning or adequacy of reasons, is not necessary for disposition of the appeal.
Once it be determined that a charge is bad at law the Respondent submits that the proper exercise of discretion is to order a permanent stay to avoid abuse of the Court's process.
Consequently:
1. If this Court was to construe s 220(4) of the LG Act as having no application to s 169 of the POEO Act, such that the charge cannot be brought against the Respondent as a matter of law, it should dismiss the appeal under s 48(3)(c) of the CAR Act; and
2. If this Court was to construe s 220(4) as applying to s 169, such that the charge can be lawfully brought against an officer of a council then there would be no basis for an order for a permanent stay of proceedings, and this Court would set aside the order made by the Local Court and remit the matter for redetermination in accordance with s 48(3)(b) CAR Act.
Thus, the question of statutory construction is fundamental to, and all but determinative of, this appeal.
The Respondent's submissions on statutory construction summarised are:
1. Section 220(4) of the LG Act states:
(4) A law of the State applies to and in respect of a council in the same way as it applies to and in respect of a body corporate (including a corporation).
1. The ordinary and grammatical meaning of the words of s 220(4) give it no application to s 169 of the POEO Act;
2. Section 169 is a law of the State that applies to and in respect of persons;
3. Section 169 is not a law of the State that "applies to and in respect of … a corporation", as required for s 220(4) to engage;
4. The statutory construction urged by the Appellant asks the Court to give s 220(4) operation beyond its literal and grammatical meaning in a manner not authorised by established rules of statutory construction; and
5. Section 169 imposes personal liability on directors and persons concerned in management of corporations, subject to the defences in s 169(1)(b) and (c).
Costs
In the event the Respondent was successful in resisting the appeal he sought an order for costs of the appeal and the costs of the proceedings in the Court below. As to the power to make an order relating to the costs of the proceedings in the Court below the Respondent submitted that such power was available and relied upon the decision of this Court in Director- General, Department of Environment and Climate Change v Gleeson & Ors (No 2) [2009] NSWLEC 200 (Gleeson). The Respondent, apart from the reliance upon the principles expressed in Gleeson had identified no relevant power conferred upon the Local Court to otherwise make an order for costs of the proceedings in the circumstances of the making of an order to stay the proceedings. The question of power therefore turns on a consideration of the principles outlined in Gleeson.
The EPA opposes each of the cost orders sought. As to the appeal the EPA submitted that the Court should not order costs as the appeal concerned a novel point of law related to persons concerned in the management of a council. As to the costs in the Court below, the EPA submitted that this Court had no power to award costs and submitted that Gleeson had no relevant application as it related to an order for the stay of the proceedings by the Land and Environment Court and not by the Local Court and an appeal from that decision.
The Respondent had made an application for costs in the Court below, however the Magistrate expressed concern as to the power to award costs in the circumstances. As a consequence, the issue of costs of those proceedings was reserved. Therefore, no order for costs has been made in the Court below.
As to the costs of the appeal this Court has the following powers pursuant to s 49 of the CAR Act:
49 Miscellaneous powers
…
(2) In determining an appeal, the Land and Environment Court may exercise any function that the Local Court could have exercised in the original Local Court proceedings.
(4) Subject to section 70, the Land and Environment Court may make such order as to the costs to be paid by either party (including the Crown) as it thinks just.
The limitation in s 70 does not apply in the circumstances of this case as it relates to circumstances where on appeal a conviction has been set aside.
On that basis, this Court clearly has power and a discretion to make an order for costs against a prosecutor with respect to the appeal. The discretion is a broad discretion and is to be exercised judicially. In the circumstances of this case, the application in the Court below, together with the orders, ultimately made were not an ordinary consequence of criminal proceedings. The outcome turned upon difficult and nuanced questions of statutory construction and the interplay between two pieces of legislation that had not been the subject of previous judicial consideration. In the circumstances, I consider that in the exercise of my discretion that the bringing of the appeal had the benefit of providing a degree of clarity to the disputed issue beyond that which the determination of the Court below allowed. In such circumstances that benefit outweighs the consideration of the costs incurred by the Respondent being compensated by such costs being otherwise met by an unsuccessful party. Accordingly, in the exercise of my discretion I determine that it is appropriate that no order for costs of the appeal be made such that each party will bear their own costs of the appeal.
The provision is directed to the underlying requirement that a "corporation" must have engaged in an act or omission. Therefore, although s 169 of the POEO Act extends liability to a person who is a director or a person concerned in the management of the corporation, known as "special executive liability", the provision could not properly be characterised as a law "in respect to a person". Further, the first four words of s 169(1), being "If a corporation contravenes", make it plain that it is a provision that applies to and in respect of a corporation.
The EPA accepts that s 220(4) of the LG Act does not operate to cause or require the word "corporation" to be substituted with "council" wherever the words appear in a law of the State. However, this acceptance does not go as far as to agree that a law of the State cannot apply to a council as if it were a corporation. Further, the EPA agrees that s 220(4) does not "deem" a council to be a corporation. However, importantly, there is a subtlety that whilst the EPA does not contend that the council is a "corporation", rather is to be treated in the same way as a corporation. Accordingly, by the operation of s 220(4), s 169(1) of the POEO Act applies in the same way to (or operates in the same way in respect of) the Council. Put simply, although the Council is not a "corporation", it is treated as a corporation for the purpose of s 169. Otherwise, s 220(4) would have no work to do. Further, s 220(4) should be understood to operate so as to affect the operation of s 220(1) and (2), again, otherwise there would be no work for the sub-section to do.
The interpretation of the Respondent would result in a council and their councillors and/or officers (management team) being immune from prosecution for any offence committed by a council as an organisation. Prior to the 2008 amendments, it was clear that persons concerned in the management of a local council could be held criminally liable for an executive liability offence (see Garrett v Freeman (No 4) [2007] NSWLEC 389 at [254]). However, if the Respondent's interpretation is accepted this would have the effect of changing the law in respect of executive liability offences and the practical result would be that persons concerned in the management of a local council could not be held criminally liable for an executive liability offence. This could not be accepted as Parliament's intention. As set out above, the Second Reading Speech indicates that Parliament's sole intention was to exclude the application of the Commonwealth WorkChoices legislation whilst preserving the operations of NSW laws that apply to councils.
The Local Court found that the charge was not lawfully available against the Respondent because s 220(4) of the LG Act did not apply to s 169 of the POEO Act. This finding was a matter of statutory construction of the operation of s 220(4).
A charge not available at law is a defect falling within the High Court's description "of such a nature that nothing that a trial judge can do in the conduct of the trial can relieve against its unfair consequences": Barton v The Queen[1980] HCA 48; (1980) 147 CLR 75 at 111. A charge unknown to law is the foremost category identified in the common law where a Court may refuse to exercise jurisdiction: Jago v District Court of NSW[1989] HCA 46; (1989) 168 CLR 23 at 38.
The stay of proceedings was a proper exercise of discretion once the Magistrate construed s 220(4) of the LG Act as having no application to s 169 of the POEO Act such that the charge against the Respondent was unknown to law.
The proper construction of a statute is a question of law. This entitles the EPA to an appeal of right under s 42(2B)(a) of the CAR Act "but only on a ground that involves a question of law alone".
As to the construction of the relevant provisions it is for this Court to determine the proper construction of s 220(4) of the LG Act as it applies to s 169 of the POEO Act. There is only one correct construction, so examination of the Magistrate's reasoning, searching for error of law either in reasoning or adequacy of reasons, is not necessary for disposition of the appeal.
Once it be determined that a charge is bad at law the Respondent submits that the proper exercise of discretion is to order a permanent stay to avoid abuse of the Court's process.
Consequently:
Where words are plain and unambiguous they should be given their ordinary and grammatical meaning, Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation(1981) 147 CLR 297; [1981] HCA 26 at 305 (Gibbs CJ).
In _Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenu_e (2009) 239 CLR 27; [2009] HCA 41 at 46-47 (Hayne, Heydon, Crennan and Kiefel JJ) confirmed that statutory construction commences with a consideration of the language of the text, which may require consideration of the context, including the general purpose of the provision and the mischief it seeks to remedy.
Firstly, the purpose underlying ss 220 and 220(4) of the LG Act must be properly identified. There are no express purposes stated for s 220.
Nowhere within the sections identified and the text of the LG Act can there be found any warrant to treat the underlying purpose of s 220 as serving the purpose of avoidance of Federal workplace laws. The underlying purpose of s 220, identified in the manner required by s 33 of the Interpretation Act was to facilitate the operation of councils by: declaring councils by statute to be bodies politic and not corporate bodies; and nonetheless making laws applying to and in respect of corporations to also apply to councils as bodies politic.
Identifying the precise purpose is a prerequisite to any wider operation of s220(4) of the LG Act. In Mills v Meeking[1990] HCA 6; (1990) 169 CLR 214 (Mills) at 235 Dawson J said:
48 Secondly, I am bound by the judgment of the Court of Criminal Appeal in Markisic v Vizza, and in particular by the passages which I have quoted at par [45] above. The decision of the Full Court of Federal Court in R v Gioa is not binding upon me. In the latter case, the dissenting judgment of Miles J is more consistent with those of the Court of Criminal Appeal in R v JS and Markisic v Vizza. The present proceedings did not involve a hearing and determination of the proceedings as required by s 253 of the Criminal Procedure Act, so that the practice that the Crown does not seek or incur costs in criminal cases does not apply.
49 Thirdly, I reject the submission of Mr D A Buchahan SC and Mr E G H Cox, appearing for the prosecutor, that the Court has no power in a criminal proceeding to order costs even where the Court rules on such things as motions to set aside subpoenas, absent any statutory authority to so order. This submission is contrary to authority. In Darcey v Pre-Term Foundation Clinic[1983] 2 NSWLR 497, Hunt J held that in a summary criminal prosecution a magistrate had an inherent power to set aside a subpoena. His Honour then considered (at 503) s 81 of the Justices Act 1902, which permitted costs to be awarded against a defendant in favour of the prosecutor or complainant in the event of a conviction or order, and against the prosecutor or complainant in favour of the defendant in the event of an order of dismissal. His Honour held, however, that the inherent power of the magistrate carries with it the inherent power to award costs in relation to the application and "such an inherent power exists independently of, and is not necessarily to be implied only from, the statutory provisions conferring jurisdiction upon the court" (at 504).
50 This judgment has been followed and applied in R v Barbaro (1992) 108 ACTR 1; (1992) 106 FLR 387 per Miles CJ and in Director-General, Department of Community v Houdek[1999] NSWSC 1031 per Bell J.
The offence created by s 169(1) of the POEO Act is not against the corporation, it is about and directed at the conduct of a director or person concerned in the management of a corporation. That s 169 applies to and in respect of persons is consistent with and confirmed by the wording of s 169(2) and (3). Section 169 is a law of the State which applies to and in respect of persons.
The first element of the offence under s 169(1) of the POEO Act is "if a corporation" commits an offence. The council named in the CAN is not a corporation by the express declaration of its status in s 220(2) of the LG Act: "not a body corporate (including a corporation)". Council is a "body politic": s 220(1).
The words of s 220(1) and (2) of the LG Act are unambiguous. The subject of s 169 of the POEO Act is officers and managers of corporations. The offence in s 169 is not directed to or in respect of an officer of a council, a council being an entity which is expressly declared by statute not to be a corporation.
The subject of s 220(4) of the LG Act is any law of the State that applies to and in respect of a body corporate (including a corporation). The unambiguous literal operation s 220(4) is: despite the legal status of a council being declared to be a body politic, a NSW law which applies to and in respect of a body corporate/corporation applies to and in respect of a council in the same way.
The phrase "in respect of" is discussed by Dennis C Pearce, Statutory Interpretation in Australia (9th ed, 2019, LexisNexis) at [12.7]ff, from which these observations about "in respect of" are taken:
1. The expression intends to convey some connection or relation between the two matters to which the words refer, the nature of the relationship being informed by the context;
2. "The phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends"; and
3. The phrase "requires no more than a relationship, whether direct or indirect, between two subject matters".
The phrase "in respect of" when read in isolation arguably could connect s 220(4) of the LG Act to s 169 of the POEO Act. However, "in respect of" is part of the phrase "to and in respect of". The phrase to and in respect of has three possible grammatical constructions:
1. To and in respect of has two conjunctive elements, both which must be present: ("and");
2. To and in respect of has two disjunctive elements either of which must be present: ("and" is construed to mean "or"); and
3. To and in respect of is a composite phrase; a hendiadys.
Section 169 of the POEO Act could not in any way be construed as applying "to" a corporation. If construction (1) is the proper construction then the charge cannot be maintained against the Respondent. Construing "and" as being disjunctive is the only construction whereby s 220(4) of the LG Act applied to s 169 could make the charge available against a council officer. That would allow "in respect of" to be read standing alone. Only then might s 220(4) have any possibility of applying to s 169. Giving the words "in respect of" the broadest possible meaning, it might then be arguable that s 169 is a law "in respect of" a corporation.
All words of the phrase must be given work to do. The relevant phrase is not "to or in respect of". The use of the singular "A law" with "and" in the phrase "to and in respect of" is significant and must be deliberate. Those observations about the use of the phrase "to and in respect of" and the grammatical context indicate that the words must have been deliberately chosen by the Parliamentary drafters. The drafters may have appreciated the wide ambit of "in respect of" and so chose the composite phrase "to and in respect of". The phrase is not properly construed as being disjunctive.
A 'hendiadys' is a composite phrase where the words to be read together as a portmanteau phrase. Applying "to" and applying "in respect of" are individually two different concepts. Applying "to" comports a direct connection. Applying "in respect of" suggests dealing with, being related to, but not necessarily operating directly upon.
As a composite phrase "to and in respect of" is significantly more restrictive than "in respect of" alone. If the phrase is grammatically categorised as a hendiadys, as a composite phrase describing one concept, then s 220 of the LG Act does not operate on s 169 of the POEO Act. The phrase seems to be used as a hendiadys, consistent with other NSW laws which use the same phrase. In order to apply to s 169, s 220(4) would need to be construed by the Court in an expansive manner, beyond its grammatical and literal meaning. That means construing the words in the same way as it applies to and in respect of a body corporate (including a corporation) to include applying to a law where the corporation itself is not the subject of the law.
The question for the Court is: Do the rules of statutory construction require the Court to construe s 220(4) of the LG Act in that expansive manner?
There are numerous statements of this principle. Pain J provides a useful summary in Minister Administering the Crown Lands Act 1989 v New South Wales Aboriginal Land Council [2018] NSWLEC 26 at [62]:
Where words are plain and unambiguous they should be given their ordinary and grammatical meaning, Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26 at 305 (Gibbs CJ).
In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 at 46-47 (Hayne, Heydon, Crennan and Kiefel JJ) confirmed that statutory construction commences with a consideration of the language of the text, which may require consideration of the context, including the general purpose of the provision and the mischief it seeks to remedy.
The literal and grammatical meaning of 220(4) of the LG Act is plain and unambiguous, as demonstrated. Section 220(4) should be given its meaning accordingly.
The controversy in this case arises only when an endeavour is made to retrofit s 220(4) of the LG Act onto s 169 of the POEO Act. The Appellant calls the purposive approach in aid of that endeavour.
Section 33 of the Interpretation Act states:
Regard to be had to purposes or objects of Acts and statutory rules
In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.
Firstly, the purpose underlying ss 220 and 220(4) of the LG Act must be properly identified. There are no express purposes stated for s 220.
Nowhere within the sections identified and the text of the LG Act can there be found any warrant to treat the underlying purpose of s 220 as serving the purpose of avoidance of Federal workplace laws. The underlying purpose of s 220, identified in the manner required by s 33 of the Interpretation Act was to facilitate the operation of councils by: declaring councils by statute to be bodies politic and not corporate bodies; and nonetheless making laws applying to and in respect of corporations to also apply to councils as bodies politic.
Identifying the precise purpose is a prerequisite to any wider operation of s220(4) of the LG Act. In Mills v Meeking (1990) 169 CLR 214 (Mills) at 235 Dawson J said:
Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done. However, if the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman. Section 35 requires a court to construe an Act, not to rewrite it, in the light of its purposes.
It seems to be contended by the Appellant that the purpose of s 220 of the LG Act to be focused upon is the avoidance of the impact of Federal workplace laws and to avoid those laws applying to employees of councils. Just what the precise modification to s 220 that is contended for to achieve that purpose, as required by Mills, is not apparent from the Appellant's submissions.
The avoidance of federal workplace laws has already been achieved by s 220 of the LG Act. Section 220(4) does not need to capture s 169 of the POEO Act in order to achieve that purpose. If the avoidance of Federal workplace laws is properly identified as the underlying purpose of s 220, then that legislative target has been hit.
The Appellant complains that unless the Court construes s 220(4) of the LG Act to apply to s 169 of the POEO Act council officers would be granted "immunity" and "avoid liability". It asks the Court to construe s 220(4) beyond its literal grammatical terms, with the formula of words to achieve that outcome unidentified. Whatever words are chosen to affect the outcome, the words cannot meet the second requirement in Mills that the words "must be consistent with the wording otherwise adopted by the draftsman".
In Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 (Cooper Brookes) at 304-5 Gibbs CJ said:
There are cases where the result of giving words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman has made a mistake, and the canons of construction are not so rigid as to prevent a realistic solution in such a case ... However, if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. To say this is not to insist on too literal an interpretation, or to deny that the court should seek the real intention of the legislature. The danger that lies in departing from the ordinary meaning of unambiguous provisions is that 'it may degrade into mere judicial criticism of the propriety of acts of the Legislature', ... may lead judges to put their own ideas of justice or social policy in place of the words of the statute. On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice …"
Those observations endorse applying s 220(4) of the LG Act in its terms. There is no ambiguity or lack of clarity in s 220(4). Problems of construction only arise when an endeavour is made to construe the words of s 220(4) to make s 169 of the POEO Act apply to council officers.
In Cooper Brookes Mason and Wilson JJ state at 321:
On the other hand, when the judge labels the operation of the statute as 'absurd', 'extraordinary', 'capricious', 'irrational' or 'obscure' he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions.
Section 220(4) of the LG Act is in neither of the categories described at p 321 of Cooper Brookes.
The Appellant's search for evidence of a purpose warranting reading s 220(4) of LG Act expansively also takes us to the Second Reading Speech. Section 34 of the Interpretation Act provides authority for having recourse to the Second Reading Speeches in the manner specified in the section:
(1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a) To confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or
(b) To determine the meaning of the provision:
(i) If the provision is ambiguous or obscure, or
(ii) If the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable.
Section 34(1)(a) of the Interpretation Act does not in terms authorise recourse to Second Reading Speeches for the purpose of expanding the field of operation of a provision beyond its ordinary grammatical meaning. The circumstances referred to in s 34(1)(b) are not engaged. It is therefore, firstly, to be doubted whether there is legislative authority enabling recourse to the Second Reading Speech for the purpose the Appellant pursues. Secondly, contrary to the submissions of the Appellant, the reading speech relied upon does not provide the support for the expanded operation of s 220(4) of the LG Act. Within the whole of that Second Reading Speech can there be found any consideration of laws which do not apply to corporations, but which involve corporations' officers, such as s 169 of the POEO Act. This was not mere inattention to a desired objective. Section 169 was not the kind of law in contemplation at all.
It is to be doubted that the object of s 169 of the LG Act was and is anything other than actual corporate officers. The EPA's contention that council officers were supposed to be caught by s 169 is not supported by what was said when, four years after the change in status of councils took place, the then Attorney-General gave the Second Reading Speech in respect of the Miscellaneous Acts Amendment (Directors' Liability) Act 2012 (NSW). This amendment changed s 169 and also introduced ss 169A, 169B and 169C into the POEO Act.
The NSW Attorney-General, Mr Greg Smith, gave the Second Reading Speech on 17 October 2012 describing those provisions in the bill as forming part of significant reform dealing with corporations. The Attorney-General stated:
Corporations are now the prevalent form of conducting business.
A corporation is considered at law to have a separate identity from that of its shareholders, directors and managers. It follows that directors and officers are not automatically taken to be criminally liable for an offence committed by a corporation unless they personally were an accessory to the particular offence, for example by aiding and abetting it. However, provisions which impose personal criminal liability on directors and officers for corporate offences beyond normal principles of accessorial liability have proliferated over many years…
That passage and reading the Second Reading Speech as a whole suggests that the application of these provisions to officers of councils was not in contemplation of Parliament when the special executive liability provisions of the POEO Act were changed and expanded in 2012.
For s 220(4) of the LG Act to have operation on s 169 of the POEO Act requires the words of s 220(4) to be construed beyond their literal meaning. Such a change to the literal meaning requires inference of additional "words of explanation".
The High Court discussed principles applicable where the construction requires giving implicit meaning or effectively reading words into a statutory provision in Taylor v The Owners - Strata Plan No 11564 (2014) 253 CLR 531 (Taylor). Gageler and Keane JJ stated at [65]:
Statutory construction involves attribution of legal meaning to statutory text, read in context. "Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning ... But not always." Context sometimes favours an ungrammatical legal meaning. Ungrammatical legal meaning sometimes involves reading statutory text as containing implicit words. Implicit words are sometimes words of limitation. They are sometimes words of extension. But they are always words of explanation. The constructional task remains throughout to expound the meaning of the statutory text, not to divine unexpressed legislative intention or to remedy perceived legislative inattention. Construction is not speculation, and it is not repair.
Based on that passage:
1. There is no material available, either within the statutory context or extrinsically in the Second Reading Speech, providing evidence of a legislative intention to capture laws which involve mention of corporations, but which are not directed at corporations;
2. The expanded construction of s 220(4) of the LG Act requires a divining of unexpressed legislative intention; and
3. This may be a case of legislative inattention. The Court should not remedy this perceived inattention by repairing a perceived oversight (if it can really be characterised as an oversight).
In Taylor, French CJ, Crennan and Bell JJ stated at [38]:
The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature".
Based on that passage:
1. Section 220(4) of the LG Act operates successfully on any law of the state that applies to and in respect of a body corporate (including a corporation);
2. There is no simple, grammatical drafting error which if uncorrected would defeat the object of the provision. The provision does considerable work without being construed to apply to provisions like s 169 of the POEO Act; and
3. Construing s 220(4) expansively is at considerable variance to the language in fact used in the section.
The Appellant properly concedes that if the charge is bad at law that the proper exercise of discretion is to grant a permanent stay. Therefore, if the Respondent's construction of s 220(4) of the LG Act and its application to s 169 of the POEO Act is accepted the appeal must be dismissed and the Orders of the Court below remain undisturbed.
As to the costs of the proceedings below, as has been observed, the proceedings have been stayed and not dismissed. Whilst this Court has the power to make orders relating to the proceedings in the Court below that power is limited to those powers conferred on that Court. Section 212 of the Criminal Procedure Act 1986 (NSW) (CP Act) provides that a Court may only award costs in criminal proceedings in accordance with the Act. As identified above, the Respondent has identified no express power to make an award where the Local Court ordered a stay of proceedings. Rather, the Respondent relied upon the determination in Gleeson wherein the Court found at [46]-[53] that:
46 Again, I find the parties' positions nicely balanced. I am inclined to the view, however, that the Court has an implied jurisdiction to award costs in the present circumstance. I have come to this view for the following reasons.
47 Firstly, in R v JS, Spigelman CJ acknowledged that the power to control proceedings for abuse of process is accompanied by the power to award costs except where the statute prohibits it. The Chief Justice said, at [6]:
" As part of its implied jurisdiction this Court has power to control abuse of its process and, as an incident of that power, may order a person who has abused that process to pay the other party's costs, at least where s 17 of the Criminal Appeal Act does not apply ."
As I have noted, there is in the present case no statutory provision, such as s 17 of the Criminal Appeal Act , which says that no costs shall be allowed on either side - that is, there is no statutory provision which prohibits the power to award costs.
48 Secondly, I am bound by the judgment of the Court of Criminal Appeal in Markisic v Vizza, and in particular by the passages which I have quoted at par [45] above. The decision of the Full Court of Federal Court in R v Gioa is not binding upon me. In the latter case, the dissenting judgment of Miles J is more consistent with those of the Court of Criminal Appeal in R v JS and Markisic v Vizza. The present proceedings did not involve a hearing and determination of the proceedings as required by s 253 of the Criminal Procedure Act, so that the practice that the Crown does not seek or incur costs in criminal cases does not apply.
49 Thirdly, I reject the submission of Mr D A Buchahan SC and Mr E G H Cox, appearing for the prosecutor, that the Court has no power in a criminal proceeding to order costs even where the Court rules on such things as motions to set aside subpoenas, absent any statutory authority to so order. This submission is contrary to authority. In Darcey v Pre-Term Foundation Clinic [1983] 2 NSWLR 497, Hunt J held that in a summary criminal prosecution a magistrate had an inherent power to set aside a subpoena. His Honour then considered (at 503) s 81 of the Justices Act 1902, which permitted costs to be awarded against a defendant in favour of the prosecutor or complainant in the event of a conviction or order, and against the prosecutor or complainant in favour of the defendant in the event of an order of dismissal. His Honour held, however, that the inherent power of the magistrate carries with it the inherent power to award costs in relation to the application and "such an inherent power exists independently of, and is not necessarily to be implied only from, the statutory provisions conferring jurisdiction upon the court" (at 504).
50 This judgment has been followed and applied in R v Barbaro (1992) 108 ACTR 1; (1992) 106 FLR 387 per Miles CJ and in Director-General, Department of Community v Houdek [1999] NSWSC 1031 per Bell J.
51 Fourthly, in the present case, the presence of s 253 in the Criminal Procedure Act is a statutory expression by the legislature designed to abrogate the general practice of having the prosecution neither seeking costs nor having costs awarded against it in criminal proceeding. The absence of an express provision in the Criminal Procedure Act to the same effect as s 17 of the Criminal Appeal Act suggests that the courts' implied power to make orders for costs is otherwise unaffected.
52 Fifthly, the statement by Bignold J in Liverpool City Council v Hodge [2006] NSWLEC 21; (2006) 143 LGERA 261 at 266 that in the case of criminal proceedings, the statutory costs power creates the true boundaries of the power and those boundaries are not to be extended by recourse to concepts of inherent or implied judicial power, is a statement that must be seen in the context of an application for costs on an indemnity basis, whereas the statute itself specified the basis upon which costs are to be calculated. That is, Bignold J was exercising the statutory power under s 253 of the Criminal Procedure Act after dismissing the summons for offences against the Environmental Planning and Assessment Act 1979. His Honour's determination has no bearing on the question which is now before me.
53 Sixthly, the purpose of the grant of a permanent stay is to prevent what would otherwise have been an abuse of the court process, and an order for costs in such circumstances is consistent with the Court of Appeal's decision in Watson v Attorney-General, noted at par [44] above, and the Court of Criminal Appeal's decision in Markisic v Vizza, noted at par [45] above.
In this case, for the reasons submitted by the EPA, I accept that the Local Court had no power to make an order that the EPA pay the Respondent's costs. The decision in Gleeson is distinguishable and not applicable to the facts and circumstances of this case. The finding in Gleeson turned upon his Honour finding that the Land and Environment Court, as a Court of superior record, had an inherent power to award costs. He further relied upon the statutory cost regime in force at that time that made no provision limiting the circumstances in which an order for costs could be made against a prosecutor. This position has changed. Since Gleeson the CP Act limits the cost making power in the Court below to the powers conferred by that Act. As observed above, there are no such powers identified. Further, the CAR Act limits the power of the Land and Environment Court to make orders in connection with the proceedings below to those powers available to the Court in first instance. In those circumstances, I am satisfied that the Court below did not have power to make a cost order in the proceedings and therefore I do not have power to make such an order.
51 Fourthly, in the present case, the presence of s 253 in the Criminal Procedure Act is a statutory expression by the legislature designed to abrogate the general practice of having the prosecution neither seeking costs nor having costs awarded against it in criminal proceeding. The absence of an express provision in the Criminal Procedure Act to the same effect as s 17 of the Criminal Appeal Act suggests that the courts' implied power to make orders for costs is otherwise unaffected.
52 Fifthly, the statement by Bignold J in Liverpool City Council v Hodge[2006] NSWLEC 21; (2006) 143 LGERA 261 at 266 that in the case of criminal proceedings, the statutory costs power creates the true boundaries of the power and those boundaries are not to be extended by recourse to concepts of inherent or implied judicial power, is a statement that must be seen in the context of an application for costs on an indemnity basis, whereas the statute itself specified the basis upon which costs are to be calculated. That is, Bignold J was exercising the statutory power under s 253 of the Criminal Procedure Act after dismissing the summons for offences against the Environmental Planning and Assessment Act 1979. His Honour's determination has no bearing on the question which is now before me.
53 Sixthly, the purpose of the grant of a permanent stay is to prevent what would otherwise have been an abuse of the court process, and an order for costs in such circumstances is consistent with the Court of Appeal's decision in Watson v Attorney-General, noted at par [44] above, and the Court of Criminal Appeal's decision in Markisic v Vizza, noted at par [45] above.